Andy Dunn: “Passion Is a Prerequisite”

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Leaders must take responsibility when problems arise in their company, believes Bonobos founding CEO Andy Dunn, MBA ‘07. (Photo by Alexander Thompson)

Andy Dunn is the founding CEO of Bonobos, a clothing company that launched online in 2007 with the introduction of a line of pants that promise a more flattering fit for men. The company has since expanded, and it now sells a full line of menswear through its e-commerce “guideshop” stores and online. Dunn graduated from Stanford GSB in 2007.

In 10 words or fewer, what is the big idea behind your business?

Clothing brands can now be built via e-commerce.

What is the best advice you’ve ever received?

As a first-time founder, I became a boss all of a sudden; it took a while to learn how to lead people. I was 28 when I co-founded Bonobos, and I searched for a while to find my authentic personal leadership style. My co-founder, my housemate from Stanford and I had diverging approaches to how to build the company, and he left the company in 2009 with a lot of grace. After his departure, there was no one blame but me when things weren’t working.

Joel Peterson, a Stanford GSB lecturer and our first angel investor, once told me, “You catch more flies with honey.” There are some schools of management that tell you to set a high bar and withhold praise, or to motivate by fear; I have come to believe more in Joel’s approach. It’s like plants leaning into sunlight. You condition people to embody the very qualities you are praising. When I started to do this, it created an environment where it is OK for people to offer recognition to their direct reports. Slowly, the culture began to flourish.

What was the most difficult lesson you have learned on the job?

One, “it’s all your fault,” and two, “nobody cares.” “It’s all your fault” came from Mark Leslie. “Nobody cares” is from Ben Horowitz. As CEO, when things go well, your job is to pass the credit on to someone else. But when things go wrong, it’s your fault.

Our site crashed on Cyber Monday of 2011 and stayed down for two weeks. It was a traumatic time for our company. We have a great customer experience, but that obviously doesn’t matter if you can’t shop on our site. Our customer-service ninjas are all energetic, empathetic people, and they were working day and night with phone calls and monitoring and responding to Facebook and Twitter. Our new head of engineering had just joined. He had the weight of the world on his shoulders four weeks into his new job.

How did it come to this? It was my fault. We had an engineering team when we started, but we dismantled it and outsourced our technology for two years. We should not have completely outsourced it. After that it took me too long to hire our head of engineering. If I could go back in time, I would have retained some of that initial team and been less extremist about the transitions to create more continuity.

It’s easy as a leader to point fingers and blame people because you have power and authority. The reality is, you can’t blame employees, because if they aren’t doing well, it is your responsibility to move them out. Not only can you take responsibility, but you have to take responsibility. Everything the company does is in your purview. As the CEO, you are responsible for everyone who is there, and as founding CEO, you can’t even blame it on your predecessor. You can make all the excuses you want about how the world changed, etc., but if you fail, no one cares why it didn’t work. It can feel psychologically daunting to think of things this way — it’s all your fault and nobody cares why it didn’t work if it doesn’t work — but it’s also empowering. If you recognize you have agency in creating problems, then you can solve them, too.

What advice would you give other entrepreneurs on how to build a great business?

Passion is a prerequisite. So is an unfair advantage. This world is intensely competitive. It’s not so much a question of whether you are a high-potential entrepreneur or whether your idea is great, but are you a high-potential entrepreneur for that great idea?

Before Bonobos, I worked on an idea for a personalized content magazine, similar to Instapaper. There was no reason I was the right person to build that business, and therefore I didn’t. People say great companies are built by great teams. I think that’s true. But I look for more than just great teams and great ideas; I like ideas that are uniquely authentic for that particular team.

What inspires you?

Creating something people love. We have around 350,000 Facebook fans. I think of all the people who clicked our “like” button because they think our brand is cool. I’m inspired by that. I love this world that makes it possible for people to imagine something should exist and then conspires to enable them to create it.

What is your greatest achievement?

The most proud I’ve ever felt was when Bonobos was named by Crain’s as one of the top 50 places to work in New York. Building a company that customers love already puts you in the top decile, but building a company that employees love is the most elegant challenge in business. That’s the top 1%. So many people don’t like their jobs or their bosses.

It is especially meaningful to me coming from 2007, when I felt like I had no idea what I was doing or how to build an organization where humans could be motivated and engaged. I once thought “company human values” were things people wrote on posters with pictures of an eagle soaring in the sunrise. I always thought that was a cliché.

I have learned there is actually something to it. What helped me was when we had about 30 employees, I took stock of the 10 best people I had ever hired and made a list of the five attributes that I believe unified them and all the great people we have hired since. Those are self-awareness, judgment, positive energy, intellectual honesty and empathy. I worked those five values into how we hire, fire, promote and retain people; we have gotten pretty empirical about it. That process of being thoughtful about how to create and protect our culture has been more important than I would ever have imagined when we began.

What do you consider your biggest failure?

At the beginning of 2010, I gave a presentation to the company saying that we have a lot to do and we were not working hard enough. It demoralized the company and was the apex of my flawed thinking of how to inspire people. I had thought about myself and what motivates me, and I wrongly thought that applied to everyone. Many founders work out of fear of failure. But most other people work hard out of joy and love and inspiration. Soon after my presentation, our head of engineering quit. He cast a vote of no confidence in my leadership. After he left, we had to dismantle his team because they didn’t have confidence in me, either. That is what led to our outsourcing our technology, which led to that Cyber Monday site crash.

Like I said, it was all my fault.

How do you come up with your best ideas?

Our e-commerce showroom model is pretty innovative. It is 1,000 square feet of personalized service. We got rid of everything that clutters the experience. Most stores send you to the fitting room on your own, and they have lots of inventory. We wanted our showroom to be more like the Apple Store’s Genius Bar for clothes.

For me, the best way to come to generate a lot of bad ideas and filter for the good ones is with [limited] experiments. Stanford GSB author Peter Sims calls these “little bets.”

What values are important to you in business?

Self-awareness, empathy, positive energy, judgment and intellectual honesty.

What impact would you like to have on the world?

I’d like to get the Cubs to the World Series. I don’t know how to be helpful on that.

My mom was born in South Asia, a part of the world where women’s education is just beginning to be appreciated, and in some cases not. I’d love to move the needle on educating women. I’ve learned a little about education as the founding board member of a New York-based social enterprise called the Blue Engine. My dad’s a retired high school history teacher, so maybe it’s in my blood.

What was your first paying job?

I worked in a darkroom of a hospital, developing X-rays. I was in the dark eight hours a day. My mom, who immigrated to the U.S. when she was 20, became an X-ray and ultrasound technician; I worked near her. It was my first exposure to hard work. No pun intended.

What is the best business book you have read?

Moneyball by Michael Lewis. It is about intellectual honesty and the value of data in addition to intuition. It’s about baseball, but it’s also about hubris. If you understand business, you shouldn’t read business books; you should read about human nature.

What businessperson do you most admire?

Joel Peterson, the chairman of JetBlue. He approaches business from a really weird place: love. He talks about treating people with profound grace and dignity, even when things are difficult. I think he’s got a unique view of how to meld caring into capitalism; it personally inspires me.

What do you think is the greatest innovation in the past decade?

Lime tortilla chips. Just kidding. The social graph! It’s a funny thing how this digital tool is making the world a more personal place. Our brand wouldn’t be possible without social media. And because of the power of digitally driven brand-building, we are now creating an in-person store experience, which is arguably more personal than anything else in retail. It’s ironic when you think about it.